Equity Release

FiremanSteve

Thanks for the info...Think I'll find myself a Financial Advisor though!!

goRt

margaretclare wrote: »

I didn't say they would pay. I said it could be a big shock, if they thought they were going to inherit something.

Where did you say that?

margaretclare

goRt wrote: »

Where did you say that?

Post # 6.

Too short! Repeat: post # 6.

margaretclare

FiremanSteve wrote: »

Thanks for the info...Think I'll find myself a Financial Advisor though!!

You should definitely do that. We did it in 2003 and one of us had to be at least 68 before we could do it. We did it to pay off an existing mortgage and to free up the money we were spending each month on repaying a mortgage which would have gone on until we were 83.

We got a repayment rate which is pegged to the existing Bank Rate, and as this has remained historically so low for so long, the debt hasn't rolled up at anything like the rate we were warned that it might do.

We haven't regretted doing it, but I've read of people who didn't do their homework adequately enough beforehand and they have regretted it. A little searching on this site using 'equity release' as key words will bring up a lot. Often the comments come from a son/daughter who thinks that 'mum/dad didn't know what they were doing, were mis-sold...' and so on. There was one I recall - dad had done this without telling mum, dad had died and left mum in an awful mess, and it was the son or daughter who was incensed about the results.

It really is something not to be undertaken lightly.

margaretclare

This is the kind of sad story which may occur: https://forums.moneysavingexpert.com/discussion/4782536

patanne

You can't get equity release at 51 for the simple reason that the company would not find it financially viable. Put another way, it could take them far too long to get their money back and that is what they are in this business for - to make money. There must be a better way for you to get finance than this!

holly_hobby

Debts (notwithstanding joint arrangements) are not transferrable on death.

The min age for lifetime equity release IS 55 yrs (interest rolled up on to the debt) or 65 for home reversion schemes (where a % of equity is essentially tsf to the provider in exchange for a capital advance).

The min age of 55 yrs is essentially to do with the duration the mge may be held over (given its contractually repayable upon entry into long term care or death), and is in consideration of obvious equity erosion .... however there are a select no of lenders that now permit the payment of interest over the term (either patially or wholly) to effectively ringfence the debt and protect the free equity for beneficiaries etc

zygurat789 wrote: »

So if there was no negative equity clause who would have to pay since it is my understanding that you cannot leave your debts

With regards the no negative equity gte - lifetime eq release mortgages are repayable on entry into long term care OR death whichever is sooner ...

So although debts aren't transferable on death, this gte is essential to protect pursuance of the the debt and individual if they simply go to LTC OR to ringfence their estate from erosion from capital or further disposal of assets within the estate, in order to repay the os mortgage, which will continue until fully discharged OR the estate is completely exhausted (at which point and resulting from the mortgagors death, any remaining debt will essentially have to be absorbed by the provider).

Which is why such a gte is essential for both the individual, and preferable for their beneficiaries ( and to be fair included by todays recognised providers).

Hope this helps

Holly